Vendor Payment Process in Business Central

Accounts Payable Strategy

First, we’ll take a look at how to generate an aging report so we can see which invoices are outstanding and what their due dates are, and then we’ll look at how to actually complete the payment process to print and post checks for those invoices using the Suggest Vendor Payments screen.   

Viewing Outstanding Invoices 

The first step is to see what invoices are outstanding in the system. You can do this easily by first navigating to the home page, and under the Payments section, there is a link to Outstanding Vendor Invoices. This allows me to easily see which vendors have outstanding invoices, the amount remaining, and the due date.  

In this example, one invoice has a due date of March 31st, so it is considered overdue (my work date in this sample company is April 6th, 2020). 

Generating an Aging Report in BC 

If I go over to the Vendors list from my homepage, I can print an aging report from there. Under Reports > General > Aged Accounts Payable. 

In the filter window, I’m going to sort by several things: 

  1. I am going to age everything as of April 30th, 2020, using the Due Date instead of the Document Date.  
  2. I can also tell the system what aging periods I want to use. In this case, I’m going to stick with 30 days. 
  3. I’ll also make sure my print detail is selected so I can see which invoices are outstanding.  
  4. And I’ll include the use external document number option, as well so I could see the invoice numbers. 

You can also bookmark this at the top, if you want to have this report accessible from the homepage. You also have the option to print to Excel, if you wanted. 

Suggest Vendor Payments 

So once you know which invoices are outstanding, the first method available to you in BC to pay the vendors is asking Business Central to suggest for me the invoices that are due on or before a certain date, I.e. using a due date cutoff. 

Navigate to Cash Management > Payment Journals. I’m just going to use the default batch that’s in there called Cash. You can create your own batch if you wanted a different one. Now, simply go to Prepare > Suggest Vendor Payments.  

I’m going to put in this last payment date as of April 30th, 2020 so that Business Central will find any invoices that are due on or before this date. 

TIP: When you’re in Suggest Vendor Payments screen, it’s helpful to also mark a couple other options. 

I like to select the Summarized Per Vendor option so that if there are multiple invoices that are due for a certain vendor, they’ll display on one check. 

Next, update your posting date (I’ll leave my posting date as today). And then my Balance Account type, which I want to be a bank account. And in this case, I’m going to print physical checks so I have my Bank Payment type set as Computer Check. 

It’s nice to select these options in the Suggest Vendor Payments screen, because then it’ll default for you automatically if you forget to select this, you will have to select this for every payment in your batch manually. 

Once you click OK, you will see that Business Central has found the outstanding invoices due before April 30th, and has automatically filled in my preferred values (Bank Payment Type is “Computer Check,” etc.) 

You can view details of the check by highlighting that row and going to Process > Apply Entries. 

In this example, you can see that this particular vendor has $1,500 due before April 30th. So the check is actually made up of two different invoices. You can see that both invoices were selected: one for $1,000 and one for $500.  

Business Central then assigns an internal payment number to these two invoices. Once you print the checks, the system will grab the next check number from the checkbook, and then that check number will actually be your payment number. But until you actually print the checks, it assigns an internal document number. 

Preview Report and Print Checks 

You can now print a report if you want to see a preview report. Navigate to Actions > Posting Test Report. This will show you the payments and the total amount that is going to be actually deducted from the checkbook. 

At this point, you can still make changes to this batch, since you have not printed the check yet. But if you’re happy with this batch of checks, just go to Check > Print Checks. 

Posting Checks 

So at this point. you have to post these checks. Simply go to Pot/Print > Post. Done! 

So now if you were to look at the Vendor Ledger entries, you will see the most recent checks are posted here.  

If you want details, again simply highlight the line, go to Entry > Applied Entries, and you can see the checks and what invoices that those checks paid off. 

Back on the homepage when you view Outstanding Vendor Invoices, you’ll see that invoices have been reduced, and now the only invoices visible are invoices that were due after your cutoff date.

And it’s that simple! The great thing about Business Central is that there is more than one way to skin a cat. So we have covered other methods of paying vendors before, and will cover still more again, but this is one way. Find your ideal workflow!


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